Something Interesting in Financial Video March 2017 - page 2

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Trading Tips: using MACD to Determine Buy and Sell Points 

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Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video May 2014

Sergey Golubev, 2014.05.12 08:54

Ichimoku Kinko Hyo Trading System

A brief look at the terminology, signals and methods for taking trades using Ichimoku Kinko Hyo.

More video on this subject:

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Ichimoku threads/posts on mql5.com forum

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Ichimoku indicator description

  1. Tenkan Sen - moving average of the highest high and lowest low over the last 9 trading days. (Highest high + Lowest low) / 2 over the last 9 trading days
  2. Kijun Sen - moving average of the highest high and lowest low over the last 26 trading days. (Highest high + Lowest low) / 2 over the last 26 trading days.
  3. Senkou Span A - the average of the Tenkan Sen and Kijun Sen, plotted 26 days ahead. (Tenkan Sen + Kijun Sen) / 2 plotted 26 days ahead
  4. Senkou Span B - the average of the highest high and lowest low over the last 52 days, plotted 26 days ahead. (Highest high + Lowest low) / 2 over the last 52 trading days plotted 26 days ahead.
  5. Chikou Span - the closing price plotted 26 days behind.

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Forex Education: Trading Elliott Wave Complex Corrections


  • "In Elliott Wave Theory, if the correction was too shallow in price or too short in time, multiple corrective patterns may string together to yield a combination. As you can imagine, these corrective patterns can be difficult to identify and frustrating to trade. In this video, we looked at some complex combination patterns, what some of them look like, where they form, and how to trade them."
  • "In Elliott Wave Theory, complex corrections are noted with the symbols, W, X, Y, Z. These symbols fall into a similar location as your corrective A-B-C would."
  • "Complex corrections may appear in the 2nd wave, 4th wave, or B wave of an eight wave Elliott Wave sequence. Many times combination or complex corrections appear in the 4th wave or B wave."

 

Forex Trading Risk Management

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Sergey Golubev, 2017.03.24 06:51

Understanding Forex Risk Management

Betting Strategies
"There are three basic ways to take a bet: Martingale, anti-Martingale or speculative. Speculation comes from the Latin word "speculari," meaning to spy out or look forward."

Know the Odds
"So, the first rule in risk management is to calculate the odds of your trade being successful. To do that, you need to grasp both fundamental and technical analysis. You will need to understand the dynamics of the market in which you are trading, and also know where the likely psychological price trigger points are, which a price chart can help you decide."

Liquidity
"The next risk factor to study is liquidity. Liquidity means that there are a sufficient number of buyers and sellers at current prices to easily and efficiently take your trade. In the case of the forex markets, liquidity, at least in the major currencies, is never a problem. This liquidity is known as market liquidity, and in the spot cash forex market, it accounts for some $2 trillion per day in trading volume."

Risk per Trade
"Another aspect of risk is determined by how much trading capital you have available. Risk per trade should always be a small percentage of your total capital. A good starting percentage could be 2% of your available trading capital. So, for example, if you have $5000 in your account, the maximum loss allowable should be no more than 2%. With these parameters your maximum loss would be $100 per trade. A 2% loss per trade would mean you can be wrong 50 times in a row before you wipe out your account. This is an unlikely scenario if you have a proper system for stacking the odds in your favor."

Leverage
"The next big risk magnifier is leverage. Leverage is the use of the bank's or broker's money rather than the strict use of your own. The spot forex market is a very leveraged market, in that you could put down a deposit of just $1,000 to actually trade $100,000. This is a 100:1 leverage factor. A one pip loss in a 100:1 leveraged situation is equal to $10. So if you had 10 mini lots in the trade, and you lost 50 pips, your loss would be $500, not $50."


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Sergey Golubev, 2017.03.24 06:59

Risk Management Techniques For Active Traders

Planning Your Trades
"As Chinese military general Sun Tzu's famously said: "Every battle is won before it is fought." The phrase implies that planning and strategy - not the battles - win wars. Similarly, successful traders commonly quote the phrase: "Plan the trade and trade the plan." Just like in war, planning ahead can often mean the difference between success and failure."

Stop-Loss and Take-Profit Points
"A stop-loss point is the price at which a trader will sell a stock and take a loss on the trade. Often this happens when a trade does not pan out the way a trader hoped. The points are designed to prevent the "it will come back" mentality and limit losses before they escalate. For example, if a stock breaks below a key support level, traders often sell as soon as possible."

How to Effectively Set Stop-Loss Points
"Setting stop-loss and take-profit points is often done using technical analysis, but fundamental analysis can also play a key role in timing. For example, if a trader is holding a stock ahead of earnings as excitement builds, he or she may want to sell before the news hits the market if expectations have become too high, regardless of whether the take-profit price was hit."

Calculating Expected Return
"Setting stop-loss and take-profit points is also necessary to calculate expected return. The importance of this calculation cannot be overstated, as it forces traders to think through their trades and rationalize them. As well, it gives them a systematic way to compare various trades and select only the most profitable ones."

[ (Probability of Gain) x (Take Profit % Gain) ] + [ (Probability of Loss) x (Stop Loss % Loss) ]


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Sergey Golubev, 2017.03.24 07:07

MQL5 WIZARD: HOW TO CREATE A RISK AND MONEY MANAGEMENT MODULE


MetaTrader 5 provides a powerful tool that allows you to quickly check various trading ideas. This is generation of Expert Advisors using the MQL5 Wizard on the basis of ready trading strategies. An Expert Advisor created with the MQL5 Wizard, is based on four pillars - four base classes:
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Risk management to most new traders usually goes in one ear and out the other. They soon realize how important it is when they lose a big chunk of their money or even worse blow out their account.

In a way we think this is healthy for investors as long as the amount of money they lose is small. Every single Forex trader that has lost a lot of money or even lost their account, get's that feeling stuck in their head and it scares many investors to never do it again.

The reason why we think it is a good thing is because, it's good to get that feeling into your head so that you know how awful it feels, so that in the future you do everything in your power to make it never happen again, it's better to learn the feeling with a small amount than a big amount.

Many Foreign Exchange investors have never learned from a profession trading education provider to teach them how their risk should be calculated.

They learn from sources online that give them a certain amount of pips or money to lose per trade and then they tell them to cut their losses.

This is the worst advice you can ever hear or follow, every single stop loss is different, so this means every single position size is different!

You see your risk management is calculated by how far your stop loss is, now if you watched this training video you saw how we find our stop losses! It's always at the previous high or low based on the trend that is happening!

For uptrends you will want to put your stop loss at the previous low & for downtrends you want to put it at the previous high.


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